ForeWord

Volume 1

Volume 2

Volume 3

Volume 4

Volume 5

Volume 6

CHAPTER 2 Foreign Exchange R$PEE ACC $%T& !era"ion# THER THA% *A%+&

F % %'RE&()E%T&

&ECT( % A Re#iden"ial &"a"u#, In terms of Section 2 (v) of FEMA 1999 "a Person resident in India means" a person residing in India for more than one hundred and eight t!o da s during the course of the preceding financia" ear #ut doe# no" include' -A.a person !ho has gone out of India or !ho sta s outside India$ in either case% a.for ta&ing up emp"o ment outside India$ or /.for carr ing on a #usiness or vocation outside India$ or other purpose$ in such circumstances as !ou"d indicate his intention to sta outside India for an uncertain period' -*.a person !ho has come to or sta in India$ in either case$ other!ise than% a0for or on ta&ing up emp"o ment in India$ or /0for carr ing on a #usiness or vocation in India$ or c0for an other purpose$ in such circumstances as !ou"d indicate his intention to sta in India for an uncertain period' i(an person or #od corporate registered or incorporated in India ii(an office$ #ranch or agenc in India o!ned or contro""ed # a person resident outside India iii(an office$ #ranch or agenc outside India o!ned or contro""ed # a person resident in India )EF(%(T( % F %R(

In terms of Section 2 (!) of FEMA 1 Per#on re#iden" ou"#ide (ndia1 means a person !ho is not resident in India( Person inc"udes an individua"$ a )indu undivided fami" $ a compan $ a firm$ an association of persons or a #od of individua"s !hether incorporated or not(

10An Indian *iti+en !ho sta s a#road for emp"o ment,carr ing on #usiness or vocation outside India or sta s a#road under circumstances indicating an intention for an uncertain duration of sta a#road is a non%resident( Persons going a#road for studies are treated as -on%.esident Indians (-.Is) and are e"igi#"e for a"" the faci"ities avai"a#"e to -.Is( Educationa" and other "oans avai"ed of # them as residents in India !i"" continue to #e avai"a#"e as per FEMA regu"ations( 1010Persons posted in /(-(0rganisations and officia"s deputed a#road # *entra",State 1overnment and Pu#"ic Sector underta&ings on temporar assignments are a"so treated as non%residents( 1020-on%resident foreign citi+ens of Indian 0rigin are treated on par !ith non% resident Indian for opening and maintaining accounts and for ma&ing investment( 2Per#on o3 (ndian Pa&istan$ if a.he at an time he"d Indian passport' or /.he or either of his parents or an of his grand% parents !as a citi+en of India # virtue of the *onstitution of India or the *iti+enship Act$ 1933 (34 of 1933)' or c.the person is a spouse of an Indian citi+en or a person referred to in su#%c"ause ( a ) or (#)' 10300verseas *orporate 2odies (0*2s) have #een derecogni+ed as an e"igi#"e 5c"ass of investor6 under various routes,schemes avai"a#"e under e7tant Foreign E7change Management .egu"ations( 1040In case of dou#ts,c"arifications regarding the -.I status of individua"s approaching #ranches to open accounts$ #ranches shou"d ta&e up !ith 8 9 A Section$ Foreign E7change 8epartment$ *entra" 0ffice( Further$ FA: on various entit"ements of -.I,PI0 pu#"ished in the !e#site of the .eserve 2an& is a"so made avai"a#"e in the home page of our ;.EAS/.< (F0.EI1-) and #ranches ma refer to the same( ACC $%T& F CERTA(% % %'RE&()E%T& TREATE) A& RE&()E%T ACC $%T& = rigin4 means a citi+en of an countr other than 2ang"adesh or

20A"though the under noted categories of persons$ firms$ companies$ etc($ are treated

as resident outside India under FEMA$ their rupee accounts !ith A8s in India are regarded as resident accounts and hence #ranches ma open such accounts and a""o! free operation of accounts$ provided the re>uirements under FEMA 1999 are comp"ied !ith( -i.Indians$ -epa"ese or 2hutanese resident in -epa" or 2hutan( -ii.0ffices and #ranches situated in -epa" or 2hutan of an #usiness carried on # a compan or a *orporation incorporated or esta#"ished under an ?a! in force in India$ -epa" or 2hutan( -iii.0ffices and #ranches in -epa" or 2hutan of an #usiness carried on as a partnership firm or other!ise # Indians$ -epa"ese or 2hutanese( 30For opening accounts in the names of Pa&istani and 2ang"adesh nationa"s$ #ranches shou"d o#tain prior approva" of .eserve 2an& of India and the approva" detai"s shou"d #e recorded in the re"ative account opening forms and ?edger,.egister fo"ios, s stem records( 40A"" the Indian #ranches of our 2an& can open and maintain the fo""o!ing categories of .upee Accounts in the names of -on%.esident Indians (-.Is) and Person of Indian 0rigin( i.0rdinar -on%.esident .upee Accounts (-.0 Accounts) ii.-on%.esident (E7terna") .upee Accounts (-.E Accounts) A comparative chart containing the sa"ient features and conditions governing credit,de#it transactions of the a#ove four t pes of accounts are furnished as Anne7ure%I( 2efore opening accounts under these schemes$ #ranches shou"d ensure that the app"icants satisf the criteria "aid do!n for the residentia" status under FEMA 1999( 502ranches shou"d #e guided # instructions contained in the fo""o!ing !hi"e opening and a""o!ing operations in non%resident rupee accounts= i)Foreign E7change Management (8eposit) .egu"ations$ 2@@@ issued under FEMA 1999 and -otification -o( FEMA 3 ,2@@@%.2 dated Ard Ma 2@@@ ( ii) Master circu"ars and AP (8I.) *ircu"ars issued # .eserve 2an& of India iii) *ircu"ars issued # *entra" 0ffice(

(.egu"ations governing maintenance of and operations on non%resident rupee accounts # authorised *o%operative,*ommercia" #an&s have #een given separate" # .eserve 2an& of India in Memorandum A2M)( 60 PE%(%5 F ACC $%T& (% THE %A6E& F %R(#=

6010An -on%.esident of Indian 0rigin or -ationa"it !ho desires to open account !ith the #ranch$ ma send the prescri#ed app"ication du" comp"eted and signed % verified # his,her 2an&,Indian Em#ass ,-otar Pu#"ic,our 2an&6s Account ho"der a"ong !ith remittance to the #ranch( 6020A"ternative" $ photocopies of passport giving passport num#er$ signature$ photographs and date of issue,e7pir date of passport ma #e sent # the prospective account ho"der( 60302ranches are permitted to open -.E accounts for Indians #efore proceeding a#road !ith +ero #a"ance in the account after verif ing Passport$ Bisa and Air tic&et for the Courne and give them the Account -um#er( 60402ranches opening rupee accounts in the names of minors$ Coint accounts shou"d ensure o#servance of the usua" precautions for opening of accounts$ issue of pass #oo&,statement of accounts$ issue and despatch of che>ue #oo&s$ operation of accounts$ standing instructions$ etc( In this connection$ attention of #ranches is invited to *hapter 1 (on *onstituents6 Accounts % 1enera") of Bo"ume I of 2oo& of Instructions(

60502ranches shou"d choose the correct t pe of non%resident account in the *2S pac&age$ for different categories of non%resident accounts opened,maintained # them( 60608etai"s such as names of -.Is$ their nationa"it $ Indian contact address$ overseas address$ passport particu"ars$ name and address of the introducer,identif ing overseas #an&,#ranch$ operationa",pa ment instructions "i&e E or S$ F or S$ A or S$ nominations etc($ shou"d #e recorded in the account master in *2S pac&ages authenticated proper" # the authorised officia"(

6072ranch shou"d send the deposit receipt through registered post to the -.I depositor at the address given in the app"ication,account opening form( ;he deposit receipt shou"d not #e handed over to agents,midd"emen,third parties( ;he #ranch shou"d ensure that comp"ete posta" address of the -.I depositor has #een furnished in the account opening form and shou"d e7ercise specia" care$ if the address is incomp"ete or on" post #o7 num#er has #een furnished( 6080;he Account opening forms$ specimen signature cards$ shou"d #e proper" fi"ed$ preserved and produced for verification # our Interna" Inspectors,.eserve 2an& of India Inspectors,E7terna" Auditors !hen re>uired( 6090In terms of Po"ic 8ocument on D<*%AM?$ -onEresident customers are p"aced under .IP E ;hree (high ris&) categor in the .is& Perception Matri7( )ence #ranches shou"d app" due di"igence !ith the avai"a#"e information provided # the customer and the estimation arrived on the additiona" information gathered through interaction !ith the customer( Suita#"e &TT: -&ingle Tran#ac"ion Thre#hold :imi". ma #e fi7ed as app"ica#"e to the ris& "eve"( RE6(TTA%CE&= 70102ranches hand"ing in!ard remittances received for opening,credit to non% resident accounts and out!ard remittances made to the de#it of non%resident accounts shou"d ensure that the remittances received,made are in conformit !ith the permitted methods prescri#ed under FEMA 1999( 70202ranches shou"d ensure that each in!ard remittance is prompt" ac&no!"edged to the -.I and re"ative credit is made to the account !ithout de"a $ o#serving procedura" guide"ines for hand"ing in!ard remittances( Simi"ar" $ the re>uests for foreign out!ard remittances shou"d #e prompt" attended to # #ranches( 7030 -A8 #ranches opening,maintaining accounts shou"d note to hand"e purchase transactions under prior report to the designated A8 #ranch( For sa"e of foreign e7change on account of -.I customers$ the -A8 #ranch shou"d ta&e up !ith the designated A8 #ranch$ !hich !i"" arrange for re"ease of e7change in the form of draft$ mai" transfer$ te"egraphic transfer$ foreign currenc ;*s,-otes$ etc( In this connection$ #ranches are advised to ensure comp"iance of procedura" aspects contained in re"evant chapters of this vo"ume(

7040 Fhi"e hand"ing foreign currenc notes,coins on account of -.Is$ #ranches shou"d #e guided # the genera" instructions regarding purchase,encashment of foreign currenc notes contained in *hapter on 5Foreign ;rave"s6 of the vo"ume( 7050 ;he purchase,sa"e transactions (in foreign e7change) in opening,maintaining non%resident accounts in the names of -.Is # #oth A8 #ranches and -A8 #ranches sha"" #e reported to ;.EAS/.< (F0.EI1-) on" # A8 #ranches$ in accordance !ith the procedure "aid do!n for such reporting( (.efer *hapter 1 of this vo"ume)( 7060 2ranches shou"d proper" record and prompt" e7ecute the various standing,specia" instructions of -.Is for "oca" dis#ursements under advice to account ho"ders( Fhi"e e7ecuting the instructions of the customers$ #ranches shou"d ensure that de#its,credits made to these accounts are permitted de#its,credits under FEMA 1999( : A%& A%) VER)RAFT&

8010102ranches granting "oans,overdrafts to -.Is against the securit of -.0,-.E deposits shou"d ensure comp"iance of guide"ines contained in -otification -o( FEMA 3,2@@@%.2 dated Ard Ma 2@@@ read !ith su#se>uent amendments and Bo"ume II of 2oo& of Instructions as !e"" as circu"ars issued # *entra" 0ffice$ regarding ma7imum amount of "oan$ interest rate$ margin$ purpose etc( 801020Advances against F*-.,-.E deposit to the depositor himse"f or to a third part shou"d #e granted up to a ma7imum of .s(1@@(@@ "acs on" $ on" under his specific re>uest,mandate and after verif ing the authenticit of the signature of the depositor( If the -.I avai"ing the "oan is on a visit to India$ the "oan documentation cou"d #e comp"eted at the #ranch$ !here he proposes to avai" of the faci"it ( If the -.I see&s to avai" of "oan from the #ranch in India$ !hen he is a#road$ the "oan document (G@ )) shou"d #e sent to the -.I a#road !ith a re>uest to e7ecute the documents at an 0verseas 2ranch or at the #ranch office of the *orrespondent of our 2an& and arrange to for!ard the documents a"ong !ith the deposit receipt (carr ing the undated discharge of the depositor,s) through the overseas #ranch,office of the correspondent #an& !here the documents !ere e7ecuted( A cop of the passport of -.I shou"d a"so #e ca""ed for a"ong !ith the app"ication and discharged deposit receipt( 801030;he covering "etter of the overseas #ranch,*orrespondent #an& for!arding the documents shou"d confirm that the depositor had ca""ed on them and e7ecuted the

documents in their presence( 0n receipt of documents$ #ranch can affi7 and effective" cance" the revenue stamp on the reverse of deposit receipt !here the undated discharge of the depositor,s appears and proceed to grant the "oan( ;he proceeds of "oans so granted cou"d #e credited to the -.0 account on" of the -.I avai"ing the "oan( /nder no circumstances$ the "oan proceeds shou"d #e credited to -.E,F*-. accounts of -.Is or repatriated a#road( 8020102ranches have to propose to their .egiona" 0ffice for sanction of "oan against -.E deposits to third parties( 8020202ranches shou"d not grant advances to third parties against -.E,F*-. 2 deposits on the #asis of Po!er of Attorne ( 802030In case of an "oan , overdraft avai"ed # a resident and !ho su#se>uent" #ecame a person resident outside India$ in terms of .eserve 2an& guide"ines under FEMA 1999$ it is "eft to the discretion and commercia" Cudgement of the authorised dea"er , #ranch to a""o! continuance of such faci"ities( In such cases$ pa ment of interest and repa ment of "oan ma #e made # in!ard remittance or out of "egitimate resources in India of the person concerned( As per .eserve 2an& guide"ines$ authorised dea"ers at their discretion , commercia" Cudgement$ are permitted to a""o! overdra!ing in -.E S2 account for a period not more than t!o !ee&s$ up to a "imit of .s(3@$@@@ su#Cect to the condition that such overdra!ing together !ith the interest pa a#"e thereon are c"eared,repaid !ithin the said period of t!o !ee&s$ out of in!ard remittance through norma" #an&ing channe"s or # transfer of funds from other -.E,F*-. accounts( )o!ever$ #ranches shou"d #e guided # our 2an&6s discretionar po!ers for various #ranches communicated from time to time$ #efore considering such re>uests from their -.I customers( 80302ranches shou"d note that the "oan,overdraft faci"ities granted to -.Is in India against the securit of -.0,-.E,F*-. 2 deposits cou"d #e adCustedH -a.# foreign in!ard remittance$ or -/.from the proceeds of deposits he"d as securit $ or -c.to the de#it of the -.0,-.E account of the #orro!er( Fhen a "oan granted to a -.I against the securit of his,her -.E,F*-. deposit is adCusted out of the rupee resources he"d in -.0 account$ #ranches shou"d note to recover interest as "aid do!n # *entra" 0ffice in 5Interest .ate on Advances6 circu"ars(

804At the time of sanctioning credit faci"it against the -.E,F*-. deposits$ #ranch shou"d necessari" o#tain instructions from the depositor$ !e"" #efore the due date$ for adCustment,ro"" over of the faci"it on the due date( 2ranch shou"d send deposit maturit notice a"ong !ith detai"s of the faci"it outstanding and the instructions a"read in p"ace( If an change in instructions is given # the depositor$ #ranch shou"d ta&e note of the same( As an interest rate movement,e7change rate movement !i"" resu"t in comp"aints from customers$ #ranches shou"d ta&e ade>uate care on this issue 90*: C+E) ACC $%T& 9010;he .eserve 2an& of India has po!ers to 5#"oc&6 accounts in India of an person$ !hether an individua"$ firm or compan resident outside India and to direct that pa ment of an sums due to that person sha"" #e made to such #"oc&ed account( A #"oc&ed account means an account opened as a #"oc&ed account at an #ranch or office in India of a #an& authorised in this #eha"f # .eserve 2an& of India( -o #"oc&ed account ma #e opened # a #ranch or an e7isting 5free6 account #"oc&ed$ e7cept under directions of .eserve 2an& of India( -o #"oc&ed account shou"d #e un #"oc&ed # a #ranch e7cept under specific direction from .eserve 2an& of India( 9020 ;he .eserve 2an& of India !i"" issue specia" directions regarding operations on individua" #"oc&ed accounts at the time of authorising opening of such #"oc&ed accounts( 9030Su#mission of S;A; 2 return to the .eserve 2an& for #"oc&ed accounts has #een dispensed !ith( Annexure#, ( E *omparative chart sho!ing the sa"ient features of -.0 and -.E deposit schemes( (( E Account 0pening Form for -.E Account( A%%E;$RE ( R$PEE ACC $%T F % %'RE&()E%T& THER THA% *A%+&

NON-RESIDENT (ORDINARY) NRO % %'RE&()E%T -E;TER%A:. < %RE

10WH

CA%

PE%, -on%.esident individua"s of Indian -ationa"it or origin (0pening of -.E accounts in the names of Pa&istani , 2ang"adeshi individua"s , entities re>uire

An person resident outside India (other than a person resident in -epa" and 2hutan) (0pening of accounts of individua"s , entities of Pa&istan , !e"" as erst!hi"e 0*2s re>uire prior approva" of .eserve 2an& of India)( 20 & $RCE F F$%)& ,

2ang"adesh nationa"it , o!nership as prior approva" of .eserve 2an& of India)(

Proceeds of remittances received in an permitted currenc tendered # the account ho"der during his temporar visit to India or transfers from rupee accounts of -on%.esident 2an&s( ?egitimate dues in rupees of account ho"der in India( ;ransfer from -.E,F*-. accounts( 8esignating e7isting account as -.0$ of a person proceeding a#road (other than -epa" or 2hutan) !hich !ou"d give him the status of a -.I(

.emittances received from a#road in an currenc $ ;ransfer from -.E,F*-. accounts( Accounts ma #e opened in the name of an e"igi#"e -.I during his temporar visit to India against tender of foreign currenc $ ;*s issued in his o!n name or notes and coins tendered provided the #ranch is satisfied that the status of the person continues to #e a non%resident( 2ranches shou"d ensure that ;*s and currenc notes tendered # the account ho"der have in fact #een #rought # him from a#road and not ac>uired "oca"" ( ;ransfers from -.0 account to -.E account

an permitted currenc from a#road or approved manner in free" converti#"e

are permitted subject to the ceiling of USD 1 millionalready available for repatriation from NRO accounts
30 T=PE F )EP &(T, S2$ *8$ ;erm 8eposit S2 -.E *8 -.E E 1A@1 E 13@1

S2$ *8$ ;erm 8eposit 40 5: C )E , Same as ordinar deposit(

-.E ;8 (S) E 11@1

;8 -.E (?) 50 PER( ) F )EP &(T , ;8 % 13 da s to 12@ months 60 (%TERE&T , S2 9 ;8EAs app"ica#"e to domestic deposits(

E 1131

;8 E 12 months to "ess than G@ months S2 % A(3 I p(a( ;8%2ASE8 0- ?I20. 8epending on period of deposit (For current rates refer circu"ar issued # *entra" 0ffice)( -o additiona" interest is pa a#"e on deposit accounts of staff mem#ers(

70 > (%T ACC $%T , A""o!ed !ith resident( % Joint -.E accounts in the names of t!o or more non%resident individua"s is permitted provided a"" the account ho"ders are persons of Indian -ationa"it or 0rigin( If the spouse of an -.I is a foreign nationa"$ the status of such a person !i"" #e that of a Person of Indian 0rigin( )o!ever$ such persons are permitted to have on" Coint #an& accounts a"ong !ith the spouse( .esidents can a"so #e Coint account ho"ders in -.E accounts on a former or survivor

basis
80 REPATR(AT( % , -ot repatria#"e e7cept for the fo""o!ing in the account E 1) *urrent income( 2) /p to /S8 1 mi""ion per financia" ear for an #onafide purpose out of the #a"ances in -.0 account,sa"e proceeds of assets in India ac>uired # !a of inheritance, "egac inc"usive of assets ac>uired out of sett"ement su#Cect to certain conditions( 90 % 6(%AT( % , -ominee can #e a person resident in -ominee can #e a person resident in India Free" repatria#"e(

India or a person resident outside India( In the case of -on%resident nominee$ the amount entit"ed to him from the account(s),deposit(s) of a -.0 account and the repatriation !i"" #e su#Cect to the overa"" cei"ing of /S8 1 mi""ion per financia" ear$ su#Cect to ta7es( 1?0 TA; ,

or a person resident outside India( In the case of -on%resident nominee$ authorised dea"ers are a""o!ed to remit funds " ing in the account of the deceased account

deceased person !i"" #e credited to his ho"der(

;a7 at the rate of A@ I on the interest Income from interest on monies standing income is to #e deducted at source and to the credit of -.E accounts is e7empt remitted to 1overnment( If the -on% .esident is from an of the countries Agreement is entered into$ the app"ica#"e rate !i"" #e deducted( from Income ;a7( 2a"ances he"d in the accounts are e7empt from Fea"th ;a7( 1ifts #a"ances in such accounts are a"so free from 1ift ;a7( (;hese ;a7 e7emptions are avai"a#"e on" in respect of -.E accounts maintained # -.Is and an fresh directive issued !i"" prevai") 110 PRE6AT$RE C: &$RE , If the deposit is up to .s( 3 "a&hs$ app"ica#"e interest for the period run prevai"ing on the date of deposit is pa a#"e !ithout forec"osure charges( 1I "ess than the rate app"ica#"e for the period the deposit has run prevai"ing on the date of deposit$ 1I "ess than the app"ica#"e interest for the period the deposit remained !ith the #an& prevai"ing on the date of deposit( Additiona" interest$ if an $ pa a#"e on #u"& deposit of .s(13 "a&hs and a#ove is not pa a#"e(

!ith !hom 8ou#"e ;a7ation Avoidance made to c"ose re"atives in India from out of

additiona" interest for #u"& deposits of If an overdue deposit rene!ed !ith interest .s(13 "a&hs and a#ove$ is not pa a#"e pa ment for the overdue period$ is c"osed on forec"osure( premature" #efore comp"eting the In case of an overdue deposit rene!ed minimum period for !hich such deposits are accepted from the date of rene!a"$ no !ith overdue interest$ is c"osed premature" #efore comp"eting the minimum period for !hich such interest is pa a#"e on the deposit and the interest a"read paid for the overdue period

deposits are accepted from the date of shou"d a"so #e recovered( rene!a"$ no interest is pa a#"e on the rene!ed deposit and the interest paid

for the overdue period shou"d a"so #e recovered( 120 RE%EWA: F )EP &(T , the depositor6s status is -.I( .ene!a" must #e made !ithin 1K da s from the due date to get retrospective effect and must #e rene!ed for the minimum period prescri#ed( If the overdue period is "ess than one ear$ the interest rate for one ear prevai"ing on date of maturit or rene!a"$ !hichever is "o!er$ is to #e app"ied( 130 CHA%5E F &TAT$& , -.E accounts shou"d #e redesignated as (if e"igi#"e) at the option of account ho"der immediate" upon the return of account ho"der to India provided the #ranch is ta&ing up emp"o ment or for carr ing on a purpose !ith an intention of residing in India for an uncertain period( Fhere the account ho"der is on" on a short visit to India$ the account ma continue to #e treated as -.E account even during his sta in this countr ( In respect of funds he"d in fi7ed deposits in -.E accounts$ interest !i"" #e pa a#"e at the rate origina"" fi7ed$ provided the deposit is he"d for the fu"" term even after conversion into resident account( 140 , 2ranches ma a""o! transactions in -.0 accounts comp" ing !ith PERAT( %& (% THE ACC $%T 140 PERAT( %& (% THE ACC $%T , 2ranches ma a""o! transactions in -.E accounts comp" ing !ith instructions contained in FEMA -otification -o( FEMA -.0 accounts shou"d #e redesignated resident rupee accounts or as .F* accounts as resident accounts on the return of account ho"der to India$ provided the #ranch is satisfied that the account up emp"o ment$ #usiness or vocation intention to sta in India for an uncertain period( Fhere the account ho"der is on a temporar visit to India$ the account shou"d continue to #e treated as -on%resident even during such visits( *an #e done as per .u"es as app"ica#"e .ene!a" of deposit can #e done as "ongas to domestic deposits(

ho"der has returned to India for ta&ing satisfied that he has returned to India for or for an other purpose indicating his #usiness or vocation or for an other

instructions contained in FEMA Ard Ma 2@@@( the account ho"ders shou"d give an underta&ing that in cases of de#its to the accounts for the purpose of investment in India and credits representing sa"e proceeds of investments$ the !ou"d ensure that such investments, disinvestments !ou"d #e covered # the genera" or India( Credi"#, Proceeds of remittances in an permitted currenc from outside

3,2@@@%.2 dated Ard Ma 2@@@( account ho"ders shou"d give an underta&ing the purpose of investment in India and credits representing sa"e proceeds of investments$ the !ou"d ensure that such investments, disinvestments !ou"d #e covered # the genera" or specia" permission of .eserve 2an& of India( Credi"#, Proceeds of remittances in an permitted currenc from outside India permitted currenc tendered # the account ho"der during his temporar visit to India or transfers from rupee accounts of non%

-otification -o( FEMA 3,2@@@%.2 dated At the time of opening of the accounts$ the At the time of opening of the accounts$ that in cases of de#its to the accounts for

specia" permission of .eserve 2an& of through norma" #an&ing channe"s or an

India through norma" #an&ing channe"s resident #an&s( 0ther "egitimate dues in or an permitted currenc tendered # India of the account ho"der( the account ho"der during his temporar visit to India or transfers from rupee accounts of non%resident #an&s( 0ther "egitimate dues in India of the account ho"der( )e/i"#, A"" "oca" pa ments in rupees inc"uding pa ments for investments )e/i"#, A"" "oca" pa ments in rupees inc"uding pa ments for investments su#Cect to comp"iance !ith the re"evant regu"ations made # the .eserve 2an& and remittance outside India of current income in India of the account ho"der net of app"ica#"e ta7( A resident can #e authorised # the -.I #

su#Cect to comp"iance !ith the re"evant !a of Po!er of Attorne or Mandate ?etter regu"ations made # the .eserve 2an& to operate the -.E accounts( ;he and remittance outside India of current !ithdra!a"s are restricted to "oca" income in India of the account ho"der net of app"ica#"e ta7( A resident can #e authorised # the -.I # !a of Po!er of Attorne or Mandate ?etter to operate the -.0 accounts( ;he !ithdra!a"s are restricted to "oca" pa ments on" # the mandate ho"der( 0perations on the account in terms of Po!er of Attorne is restricted to !ithdra!a"s for pa ments on" # the mandate ho"der( 0perations on the account in terms of Po!er of Attorne is restricted to !ithdra!a"s for permissi#"e "oca" pa ments or remittance to the account ho"der himse"f through norma" #an&ing channe"s(

permissi#"e "oca" pa ments or remittance to the account ho"der himse"f through norma" #an&ing channe"s(

&$*6(&&( %

F &TATE6E%T&

;reasur dept( !ith the assistance of I;8$ *0 has deve"oped a programme to cu"" out the data from the core server and the same is #eing successfu"" transmitted to .eserve 2an& of India( In vie! of the a#ove #ranches and .egiona" offices need not su#mit -.8 *S. data( )o!ever$ the updation !ith regard to countr codes and transaction codes !i"" have to #e continued (.ef(;reasur (Foreign) Perm(*ir( L4 dated 19(@A(2@1@)

A%%E;$RE (( (%)(A% ACC $%T VER&EA& *A%+ PE%(%5 F R6 PE%(%5 F R6 (& AVA(:A*:E (% h""!,@@AAA0io/0in.

-A :ATE&T ACC $%T A%%E;$RE (((

&ECT( % * B F RE(5% C$RRE%C= ACC $%T& (% (%)(A 1(2ranches shou"d #e guided # instructions contained in -otification -o( FEMA 3,2@@@%.2 dated Ard Ma 2@@@$ master circu"ars issued # .2I and circu"ars issued # *entra" 0ffice from time to time$ !ith regard to opening and maintaining Foreign *urrenc accounts in India( 2(-on .esident individua"s of Indian nationa"it or origin (-.Is) are permitted to maintain foreign currenc accounts,deposits in India under specia" schemes( -on% resident Indians returning to India are a"so permitted to open foreign currenc accounts !ith designated #ranches under different schemes( 0verseas *orporate 2odies have #een de recognised as a c"ass of investor$ under FEMA$ !(e(f(

1G(@9(2@@A( ;he guide"ines re"ating to the fo""o!ing t pe of accounts are furnished in this chapter( (i) Foreign *urrenc (-on%.esident) Accounts (2an&s) Scheme F*-.(2) (ii) .esident Foreign *urrenc (.F*) Accounts( (iii) .esident Foreign *urrenc (8omestic) Accounts ;he guide"ines re"ating to E7change Earners Foreign *urrenc Accounts are furnished in *hapter 1 of this vo"ume of 2oo& of Instructions( A( 2ranches shou"d e7tract #a"ances in S2 accounts in foreign currenc ever month and ta"" !ith 1?( In respect of term deposits maintained in foreign currenc $ #ranches shou"d e7tract #a"ances ever ha"f% ear end and ta"" !ith 1?( K( 2ranches shou"d ensure that correspondence from account ho"ders maintaining foreign currenc accounts are proper" attended to !ithout giving room for an comp"aints( Account 0pening forms and a"" correspondence re"ating to such deposits must #e proper" fi"ed and &ept( F RE(5% C$RRE%C= % %'RE&()E%T -*A%+&. ACC $%T& ' FC%R -*. 10/nder F*-.(2) Scheme$ the e7change ris& is #orne # the respective 2an&s !hich maintain the accounts( 20 ;he accounts are maintained in designated foreign currencies and the account ho"der is not e7posed to an e7change ris&( 30 )E&(5%ATE) *RA%CHE& 0n" #ranches !hich are designated # *entra" 0ffice to maintain F*-. (2) deposits shou"d hand"e such deposits( 0ther #ranches are not permitted to maintain F*-. (2) deposits( Such restriction is made to ensure prompt reporting s stem and efficient management of funds( ;he "ist of authorised #ranches is disp"a ed in the ;.EAS/.< (F0.EI1-) intranet site( 40 E:(5(*(:(T= , Individua"s of Indian nationa"it or origin (-.Is) as defined under -.E Accounts Scheme are e"igi#"e to open deposit accounts under the captioned scheme( 50)E&(5%ATE) C$RRE%C(E& , 8eposits can #e opened on" in the fo""o!ing designated currencies vi+($ /S 8o""ar$

Pound Ster"ing$ E/.0$ Japanese <en$ *anadian 8o""ar S!iss "ranc#Ne! $ealand

Dollar and %ustralian Dollar 6.TYPE OF ACCOUNT, PERIOD AND RATE OF INTEREST : 6.1. %ccounts are permitted to be opened only in the form of term deposits Our &an' permits opening of term deposits as RD( only for the follo!ing maturities)
-a.0ne ear and a#ove #ut "ess than t!o ears -/.;!o ears and a#ove #ut "ess than three ears -c.;hree ears and a#ove #ut "ess than four ears -d.Four ears and a#ove #ut "ess than five ears -e.Five ears on" 1? *08E = F*-.%2 (S) H 11@L F*-.%2 (?) H 113L 60200ur Foreign E7change 8epartment$ *entra" 0ffice advises the interest rates and it must #e updated ever month on the first !or&ing da irrespective of !hether an operation is there or not for a"" currencies in F*-.2( Interest shou"d #e ca"cu"ated on the #asis of AG@ da s per ear as per Internationa" practice( 6030 -o additiona" interest is pa a#"e on deposit accounts of staff mem#ers( 70> (%T ACC $%T, ;he account ma #e he"d sing" or Coint" on" in the names of e"igi#"e persons( 80 PE%(%5 F ACC $%T&,

L(1(F*-.(2) shou"d #e opened on" after citing the credit in our -ostro account( ;he e"igi#"e person shou"d su#mit app"ication in the form prescri#ed (Anne7ure % I) for opening F*-.(2) % .8P account$ du" fi""ed in and signed$ supported # re>uired documents( L(2( ;he account ma #e opened in the name of the e"igi#"e person # fresh remittance from a#road through norma" #an&ing channe" or # transfer from their -.E,F*-. account(

L(A(;he account ma #e opened # -on%.esidents during their visits to India !ith foreign currenc trave""ers che>ues in his,her o!n name or foreign currenc notes( Fhi"e doing so$ #ranches shou"d #e satisfied that he,she is sti"" a -on%.esident Indian( 2ranches shou"d ca"" for *urrenc 8ec"aration Form (*8F) % !herever app"ica#"e % for endorsement and &eep a photocop of the same on record( L(K( .emittances from a#road for opening,crediting to F*-. (2) accounts !ou"d ordinari" #e made on" in the designated currenc in !hich the account is desired to #e opened,maintained( If$ ho!ever$ remittance is received in a currenc other than the designated currenc (inc"uding funds received in rupees # de#it to the account of a non%resident #an&) it !i"" #e converted into the designated currenc at the prevai"ing rate # the #ranch at the ris& and cost of the remitter and the account opened,maintained in the designated currenc ( 8050 6(%(6$6 A6 $%T F )EP &(T&,

2ranches shou"d accept deposits !ith minimum si+e stipu"ations as advised # ;reasur (Foreign)$ *entra" 0ffice from time to time( */..E-*< AM0/-; 12P /S8 E/.0 JP< *A8 A/8 MI-IM/M 1@@@ 1@@@ 1@@@ 1@@@@@ 1@@@ 1@@@

806( A# a ruleC /ranche# #hould !a## accoun" o!ening en"rie# onlD a3"er recei!" o3 3und# in our %o#"ro Accoun"0 Hence o!ening o3 FC%R-*. de!o#i" /D !urcha#ing releEan" in#"rumen" /D de/i" "o )*P-F. i# !rohi/i"ed0 90 RE%EWA: F )EP &(T& , 9(1(If the depositor has given automatic rene!a" instruction$ the matured deposit cou"d #e rene!ed on maturit !ithout reference to the account ho"der( 9(2( In the a#sence of automatic rene!a" instruction$ if the deposit is not rene!ed on the date of maturit and rene!ed su#se>uent" $ then overdue interest for the #ro&en period !i"" #e paid at the .F* H S2 rate (simp"e) prevai"ing on the date of

maturit ( 2ac& dated rene!a" of deposit is not permitted 1?0 PRE6AT$RE C: &$RE, .eserve 2an& has stipu"ated that !hi"e 2an&s shou"d permit premature !ithdra!a" of deposits under the scheme$ the are free to "ev pena"t for such premature !ithdra!a" at their discretion( 2an&s ma a"so$ at their discretion$ "ev pena"t to recover the s!ap cost in the case of premature !ithdra!a" of F*-. (2) deposits( ;he components of pena"t shou"d #e c"ear" #rought to the notice of the depositors at the time of acceptance of deposits and if it is not done$ the e7change "oss arising out of premature !ithdra!a" !i"" have to #e #orne # the 2an&s( 0ur 2an&s6 present guide"ines on premature c"osure of F*-.(2) deposit are as under -a.-o interest is pa a#"e if the deposit is c"osed #efore one ear( Interest is paid at the e"igi#"e rate for the period the deposit has run minu#a pena"t of 1I on premature c"osure of the deposit for pa ment( Interest is paid at the e"igi#"e rate for the period the deposit has run Ai"hou" an pena"t $ if such c"osure is for rene!a"( -/. 0verdue interest$ paid if an $ at the time of rene!a" of the deposit !hich is no! c"osed #efore maturit $ !i"" #e recovered if the deposit has run for a period of "ess than G months and need not #e recovered if such forec"osure ta&es p"ace after G months( 110PA=6E%T F )EP &(T&,

Maturit proceeds of F*-. (2) accounts or premature !ithdra!a" thereof for the purpose of meeting "oca" dis#ursements in India shou"d #e converted into rupees at ;; #u ing rate for the re"ative currenc ru"ing on the date of !ithdra!a" and shou"d #e routed through the account of the depositor( *ranche# #hould exerci#e u"mo#" cau"ion and care Ahen "heD receiEe in#"ruc"ion 3or clo#ure -on ma"uri"D or 3oreclo#ure. and re!a"ria"ion /D Fax or e'mail0 TheD #hould Eeri3D i"# au"hen"ici"D and #eeF con3irma"ion 3rom "he de!o#i"or /e3ore ac"ing u!on #uch me##age# 120An in"and movement of funds for the purpose of operating F*-. (2) accounts as !e"" as for repatriation a#road for #a"ances he"d in F*-. (2) accounts !ou"d #e free of in"and e7change or commission$ for non%resident depositors( 130 WHE% THE )EP &(T R *EC 6E& RE&()E%T,

Fhen the -.I returns to India for permanent sett"ement$ the fo""o!ing options are avai"a#"e to him regarding treatment of F*-.(2) deposit !ith une7pired maturit = -a..etain the F*-.(2) deposit as per the origina" terms ti"" maturit $ i(e($ the origina" contracted rate of interest on F*-.(2) deposit !i"" #e paid ti"" maturit for the contracted period( 0n maturit $ convert the F*-.(2) deposit as .F* 8eposit (if e"igi#"e) or as a .upee deposit at ;; #u ing rate prevai"ing on the date of conversion( -/.If the depositor re>uests for premature c"osure of F*-.(2) deposit and conversion to .F* deposit$ pena" provisions sha"" not #e app"ica#"e( )o!ever$ if the depositor re>uests for premature c"osure and conversion to rupee deposit$ pena" provisions sha"" app" ( 14 % 6(%AT( %&, 14010 -omination faci"it is avai"a#"e to F*-.(2) depositors as in an other deposit accounts( 14020 .esident nominees ma #e a""o!ed funds (From out of their share of proceeds of -on%.esident Indian6s deposits) to!ards "i>uidation of "ia#i"ities of the deceased -.I depositor at the overseas centre$ #efore sett"ing the c"aim( 14030 (%TERE&T PA=A*:E )EP &(T R@&, 2ranches shou"d note the fo""o!ing guide"ines !hi"e sett"ing c"aims in the case of a deposit standing in the name,s of H (i)a deceased individua" depositor$ or (ii)t!o or more Coint depositors$ !here one of the depositors had died( Interest on such F*-.(2) deposit,s of the deceased depositor$ sha"" #e paid as indicated #e"o! = I( At the contracted rate on maturit of the deposit( II(In the event of the heir,s$ "ega" representative,s or nominee,s c"aiming the % FC%R-*. )EP &(T F A )ECEA&E)

pa ment of the deposit #efore maturit date$ #ranches !i"" pa interest at the rate as app"ica#"e for the period for !hich the deposit has run (as prevai"ing at the time of opening of the deposit in >uestion) !ithout "ev ing an pena" interest(

III(In the event of death of the depositor #efore the date of maturit of the deposit and the amount is c"aimed after the date of maturit $ the #an& shou"d pa interest at the contracted rate ti"" the date of maturit ( From the date of maturit to the date of pa ment$ the #an& shou"d pa simp"e interest at the app"ica#"e rate operative on the date of maturit $ for the period for !hich the deposit remained !ith the #an& #e ond the date of maturit ( IB(If the depositor dies after the date of maturit of the deposit$ the #an& shou"d pa interest at a rate operative on the date of maturit in respect of savings deposits he"d under .F* account scheme$ from the date of maturit ti"" date of pa ment$ appropriate to the currenc of the deposit$ irrespective of the fact !hether the heir,s$ "ega" representative,s or nominee,s see& rene!a" of the deposit,s or see& repatriation of the amount$ su#Cect to the condition that the are e"igi#"e to receive the c"aim in foreign currenc ( B(If the heirs$ "ega" representatives or nominees see& sp"itting of the deposit and issuance of t!o or more receipts individua"" in the name of heir,s$ "ega" representative,s or nominee,s$ such sp"itting sha"" not #e construed as premature c"osure and no pena"t !i"" #e "evied provided the period and the aggregate amount of the deposit do not undergo an change( BI(If the "ega" heir,s are residents$ then the maturit proceeds ma #e converted into Indian rupees on the date of maturit and for the su#se>uent period the interest sha"" #e pa a#"e at a rate app"ica#"e to the deposit of simi"ar maturit under the domestic deposit scheme( 150 : A%& A%) 15010 T VER)RAFT&

THE )EP &(T R

2ranch ma e7tend "oans and advances to the depositor against his deposit for purposes other than prohi#ited investments su#Cect to comp"iance of prescri#ed margin norms and rate of interest as per *entra" 0ffice circu"ars in force( ;he genera" guide"ines stated in paragraphs 9(1(1( to 9(K of this chapter under section A sha"" app" for "oans and advances granted against the securit of F*-. 2 deposits( Re#erEe *anF ha# !rohi/i"ed *anF# 3rom gran"ing 3re#h loan# or reneAing exi#"ing loan# in exce## o3 Ru!ee# 1?? laFh# again#" FC%R -*. de!o#i"# ei"her "o "he de!o#i"or or "hird !ar"ie#0 ;he "oan proceeds is to #e credited to -.0 Account and not to depositor6s -.E Account(

15020 ;he "oan can #e repaid either # fresh remittance from a#road or out of maturit proceeds of the deposit( ;he "oan can #e repaid out of funds he"d in his,her -.0 account( 15030T TH(R) PART(E&

2ranch ma propose to their .egiona" 0ffice for "oans to third parties !ho are residents in India against F*-. (2) deposits$ su#Cect to fo""o!ing conditions= -a.;here shou"d not #e an direct or indirect foreign e7change consideration for the non%resident depositor agreeing to p"edge his,her deposit$ to ena#"e the resident individua",firm,compan to o#tain the faci"it ( -/.;he period of "oan shou"d not e7ceed the une7pired period of maturit of the deposit accepted as securit ( ;he non%resident depositor shou"d furnish an irrevoca#"e underta&ing to the #ranch not to !ithdra! the deposit during the pendenc of "oan,overdraft( -c.;he "oan shou"d #e uti"ised for persona" purposes or for carr ing on #usiness activit other than prohi#ited purposes( -d.2ranches shou"d satisf themse"ves as to the accepta#i"it of purpose$ genuineness of the credit needs of the #orro!er and end use of funds( ;he shou"d not #e guided so"e" # the avai"a#i"it of securit ( -e.2ranches shou"d comp" !ith prescri#ed margin norms and rate of interest as per *entra" 0ffice circu"ars in force( 150402ranches shou"d #e guided # 8ocumentation procedure for "oans against -.E deposits set out in this *hapter !hi"e granting "oans against F*-.(2) deposits( 160F RWAR) C VER T % %'RE&()E%T (%)(A%&

2ranches are no! permitted to #oo& for!ard cover for their -on%.esident Indian customers against their F*-.(2) and -.E deposits( 2ranches shou"d refer to detai"ed guide"ines furnished in the *hapter -o( 4 tit"ed 5For!ard contracts6 of this vo"ume of 2oo& of Instructions( 170 REP RT(%5 170102ranches shou"d send s stem generated reports of opening, rene!a" , c"osure of F*-.(2) 8eposits in the prescri#ed format prompt" ( 17020 -A8 #ranches authorised to hand"e F*-. deposits shou"d for!ard such reports to the respective A8 #ranch(

1703 ;he >uarter" F*-. 2 reconci"iation statement shou"d #e thorough" scrutinised and su#mitted after reconci"iation a"ong !ith necessar opening,rene!a",c"osure reports( 180&TATE6E%T As per e7tant guide"ines$ #ranches shou"d do the updation !ith regard to the countr codes and transaction codes( ;he Foreign E7change 8epartment$ *entra" 0ffice$ !ou"d send the statement -.8%*S. for the #an& as a !ho"e to .eserve 2an& of India$ Mum#ai( 190 FC%R &$&PE%&E ACC $%T B %A) *RA%CHE& 19010;he F*-. (Suspense) Account shou"d not #e used # an #ranch for an purpose( 2?0 2ranches shou"d #e guided # instructions contained Master *ircu"ar on F*-. 2 and amendments thereto # AP (8I.) circu"ars issued # .eserve 2an& of India(

RE&()E%T F RE(5% C$RRE%C= ACC $%T& &CHE6E -RFC Accoun"#. A"" A8 2ranches are permitted to open .F* accounts su#Cect to comp"iance of instructions "aid do!n in Foreign E7change Management (Foreign *urrenc Accounts # a person resident in India) .egu"ations$ 2@@@ E -otification -o( FEMA 1@,2@@@%.2 dated Ard Ma 2@@@ and su#se>uent amendments as !e"" as other instructions issued # *entra" 0ffice from time to time( 10 Eligi/ili"D 1(1(/nder this scheme$ persons of Indian nationa"it or origin$ !ho having #een resident outside India for a continuous period of not "ess than one ear and have #ecome persons resident in India on or after 1Lth Apri" 1992 are e"igi#"e to open and maintain .F* accounts !ith #ranches in a free" converti#"e foreign currenc ( (For arriving at the period of continuous sta a#road of not "ess than one ear$ short visits to

India on persona" grounds "i&e meeting fami" mem#ers,re"atives or on hea"th grounds !hich do not indicate the person6s intention to sta in India for an indefinite period ma #e ignored) 1(2(Persons !ho return to India after a short assignment of "ess than one ear a#road desiring to have .F* accounts shou"d app" through the #ranch to .2I in form .F*( .F* accounts opened !ith the specific approva" of .2I !i"" #e governed # the conditions stipu"ated # .2I !hi"e granting such approva"( 1(A(Persons !ho returned to India prior to 1Lth Apri" 1992 after having #een resident outside India for a continuous period of not "ess than one ear are a"so e"igi#"e to open .F* accounts if= a0;he are ho"ding va"id specific permission,"icense from .2I as on 14%K%92 to maintain foreign currenc accounts or to ho"d other foreign currenc assets a#road or /0;he are in receipt of pension or other monetar #enefits from their overseas emp"o ers su#se>uent to their return to India even if the did not maintain foreign currenc accounts or ho"d other foreign currenc assets a#road( For the purpose of this Scheme$ a person (not #eing a citi+en of Pa&istan or 2ang"adesh) sha"" #e deemed to #e of Indian origin$ if= i(he at an time he"d an Indian passport or ii(he or either of his parents or an of his grandparents !as a citi+en of India # virtue of the *onstitution of India or the *iti+enship Act 1933 or iii(that person is the spouse of an Indian citi+en or of a person of Indian origin (not #eing a citi+en of Pa&istan or 2ang"adesh) 20 %a"ure o3 Accoun", 2(1(;he .F* account can #e maintained in the form of term deposits or Savings 2an& Account (!ithout che>ue #oo& faci"it )( ;he Savings 2an& account !i"" #e !ithout che>ue #oo& faci"it and the minimum #a"ance is /S8 3@@ to #ecome e"igi#"e for .F* S2 interest( ;he period of term deposit in "he 3orm o3 R)P !ou"d #e as under= i)Si7 months and a#ove #ut "ess than 0ne ear

ii)0ne ear and a#ove #ut "ess than ;!o ears iii);!o ears and a#ove #ut "ess than ;hree ears iv);hree ears on" 2e ond 12 months$ the deposits can #e accepted in mu"tip"es of A months on" ( 2(2( 1?,Profit and ?oss account codes for such accounts are= .F* S2 Account .F* S8,;8 8eposit Account Interest Paid on .F* deposit account E 12@3 E 11@3 E 3121

2(A(;he e"igi#"e person shou"d su#mit app"ication in the form prescri#ed (Anne7ure I A)$ du" fi""ed in and signed supported # re>uired documents( 2ranches can open the account on #eing satisfied that the app"icant is an e"igi#"e person and that funds #eing credited to the account represent remittances out of e"igi#"e assets( 2(K( 2ranches shou"d have a separate Account 0pening .egister and suita#"e account num#ers for S2 and ;8 ma #e given as .F*%S2 and .F*%;8 etc( 2ranches ma issue standard S2 pass #oo&s for .F*%S2 accounts after ma&ing necessar modifications( Standard 8eposit .eceipts ma #e issued for .F* term deposits( 2(3( 2ranches ma at the option of .F* depositor o#tain an underta&ing for automatic rene!a" of deposits on due date( 30 >oin" Accoun", ;he account ma #e he"d sing" or Coint" on" in the names of e"igi#"e persons( 40 CurrencD o3 Accoun", ;he account can #e denominated in an of the fo""o!ing currencies= /S8$ 12P$ JP<$ E/.0$ *A8 and A/8 FE8AI !ee&" average rates pu#"ished # ;.EAS/.< (F0.EI1-) ever >uarter !i"" #e used for accounting purposes instead of the notiona" rates used ear"ier( 50 ReneAal o3 oEerdue RFC de!o#i" and in"ere#" !aDmen" 3or oEerdue !eriod0 3(1( 0verdue .F* deposits cannot #e rene!ed from #ac& date( Such deposit can #e rene!ed from prospective date on" ( 3(2( For the overdue period$ #ranches are permitted to pa interest at the .F* S2 rate (simp"e) appropriate to the currenc of deposit$ prevai"ing at the time of maturit or at

the time of rene!a"$ !hichever is "o!er( 3(A( If such rene!ed deposits are c"osed #efore comp"etion of G months$ then the overdue interest paid on such rene!ed deposits shou"d #e recovered( -o interest is pa a#"e on the deposit as it !ou"d not have run for the minimum period( 3(K( .ecover of s!ap charges has #een dispensed !ith for the time #eing( 3(3( In case of premature c"osure$ !hether overdue interest has #een paid or not$ #ranches !i"" pa interest at the rate app"ica#"e to the period for !hich the deposit has run$ as prevai"ing on the date of opening,rene!a" "ess one percent pena"t ( 60 Credi"# "o "he Accoun" /nder noted credit transactions ma #e a""o!ed # #ranches in .F* accounts= G(1( .emittance in converti#"e foreign currenc from outside India through norma" #an&ing channe"s representing= i(Funds in #an& accounts outside India forming part of e"igi#"e assets he"d # the e"igi#"e person( ii(Income such as dividend$ interest$ profit$ rent$ etc( earned on e"igi#"e assets he"d # the e"igi#"e person( iii(Sa"e proceeds of e"igi#"e assets( G(2( Pension or other monetar #enefits received from outside India in converti#"e foreign currenc $ through norma" #an&ing channe"s$ arising out of emp"o ment ta&en up outside India # the e"igi#"e person prior to his returning to India( G(A( Interest earned on .F* account( G(K( Foreign currenc notes,trave""ers che>ues #rought into India # the e"igi#"e person$ provided that !here the amount tendered e7ceeds /S8 1@@@@ or its e>uiva"ent or !here the va"ue of foreign currenc ,#an& notes e7ceeds /S8 3@@@ or its e>uiva"ent the have #een dec"ared on the *urrenc 8ec"aration Form( G(3( ;ransfers from other .F* accounts of the account ho"der( G(G( 2a"ances in an -.E,F*-. Account (other than in -.E rupee accounts of persons

resident in the erst!hi"e 2i"atera" 1roup countries !hich have #een funded in non% converti#"e rupees) in the name of the e"igi#"e person standing to his credit at the time of his arriva" in India( (-o pena"t !ou"d #e pa a#"e for premature !ithdra!a" of -.E,F*-. deposits in such cases)( G(4( /nuti"ised entit"ements under an va"id .IFEE permit or .econversion faci"it granted # .2I( G(L( /nspent foreign e7change surrendered # .F* account ho"ders can a"so #e accepted provided the #ranch is satisfied that the foreign e7change,currenc concerned had in fact #een re"eased for trave" etc( a#road # de#it to the same .F* accounts and the amount of foreign e7change,currenc is surrendered !ithin the stipu"ated period as re>uired under the E7change *ontro" .egu"ations( (E"igi#"e Assets H Assets ac>uired or he"d other!ise than in contravention of the Act # an e"igi#"e person$ !hi"e he !as resident outside India (non%resident)$ in the form of deposits in #an&s outside India$ investments in foreign currenc shares or securities or immova#"e properties situated outside India or investments in #usiness etc( outside India and inc"ude foreign e7change earnings through emp"o ment$ #usiness or vocation outside India ta&en up or commenced # such person !hi"e he !as resident outside India)( 70 )e/i"# "o "he Accoun" 4(1( ;he funds in the account ma #e a""o!ed to #e free" uti"ised # the account ho"der for #onafide remittance outside India through norma" #an&ing channe"s inc"uding for investments a#road provided the cost of such investments and,or su#se>uent pa ments re>uired there for are met out of .F* account( 4(2( 2ranches ma permit !ithdra!a"s,pa ments from such accounts (other than for remittances) outside India$ or for pa ments in foreign currenc authorised to #e made in India # .2I on" in e>uiva"ent Indian rupees( 80 Ra"e o3 (n"ere#" .ates of interest on deposits he"d under this scheme are advised # ;.EAS/.< (F0.EI1-)$ *hennai on a month" #asis( For .F*%S2 accounts$ interest !i"" #e pa a#"e ever >uarter on the "ast !or&ing da of the >uarter on product%!ise ca"cu"ations( For .F*% term deposit accounts for the period 12 months and a#ove$ interest !i"" #e compounded ha"f ear" as in the case of F*-. 2 deposits( For term deposits of G months and a#ove #ut "ess than 12 months$ interest !i"" #e paid at a simp"e rate(

90 :oan#@oEerdra3"# again#" "he de!o#i"# -o "oan,overdrafts sha"" #e granted # #ranches against #a"ances in .F* accounts( 1?0 %omina"ion Facili"D 1@(1( ;he .F* accounts sha"" have the nomination faci"it as in the case of resident rupee account( 110 Tran#3er o3 *alance# on /ecoming %on're#iden" Funds he"d in .F* account ma #e free" remitted a#road or credited to fresh -.E,F*-. accounts in the event of the account ho"der #ecoming non%resident # virtue of his going a#road for emp"o ment etc( 120 Accoun"ing Procedure, 2ranches ma refer to Permanent FM *ircu"ar -o(A2,92%9A dated 2K(9(92 issued # Foreign E7change 8epartment$ *entra" 0ffice( Enc"ose a cop of the circu"ar A--EM/.ES I( A( App"ication for opening .F* Account(

II( A( 8ai" .eport of EEF*,.F*,F*A ;ransactions( (avai"a#"e in *hapter I H EEF* Accounts) For an change in Accounting Procedure that ma ta&e p"ace hereafter #ranches are to #e guided # the *ircu"ars that ma #e issued # the Foreign E7change 8epartment$ *entra" 0ffice( RE&()E%T F RE(5% C$RRE%C= -) 6E&T(C. ACC $%T .eserve 2an& vide FEMA notification -o( FEMA 4K,2@@2%.2 dated -ovem#er 1$ 2@@2 has a""o!ed a person resident in India to open$ ho"d and maintain !ith an authori+ed dea"er in India a foreign currenc account to #e &no!n as .esident Foreign *urrenc (8omestic) Account( According" a"" A8 #ranches are permitted to open a foreign currenc deposit account for a person (I-8IBI8/A? 0-?<) resident in India su#Cect to the norms,procedures given #e"o!( An .F* (8) deposit on account of -A8 #ranch customers shou"d #e opened at the nearest A8 #ranch on" ( 10 Eligi/ili"D /nder the scheme$ a person resident (individua") in India is e"igi#"e to open a .F* (8)

account( 20 %a"ure o3 Accoun" ;he .F* (8) account can #e maintained in the form of *urrent Account on" (!ithout che>ue #oo& faci"it )( 30 Permi""ed CurrencD ;he account can #e denominated in an one of the currencies permitted for F*-. (2) vi+( /S8$ 12P$ E/.$ JP<$ A/8$ *A8 40 (n"ere#" -o interest is pa a#"e on .F* (8) account( 50 6inimum and 6aximum *alance ;he minimum amount !i"" #e /S8 3@@ or its e>uiva"ent in other currencies and there is no ma7imum prescri#ed( 60 Permi""ed Credi"# ;he fo""o!ing *redits are a""o!ed in .F* (8) account

1(0ut of foreign e7change ac>uired in the form of *urrenc -otes$ 2an& -otes and ;rave""ers *he>ues !hi"e on a visit to an p"ace outside India # !a of pa ment for services not arising from an #usiness in or an thing done in India 2(Amount received as a honorarium or gift or for services rendered or in sett"ement of an "a!fu" o#"igation from an person not resident in India and !ho is on a visit to India A(Amount received # !a of honorarium or gift !hi"e on a visit to an p"ace outside India K(.epresents the unspent amount of foreign e7change ac>uired # him from an authori+ed person for trave" a#road 3(Foreign e7change earned through e7port of goods and,or services$ ro a"t $ honorarium etc($ and,or gifts received from c"ose re"atives (as defined in *ompanies Act) and repatriated to India through norma" #an&ing channe"s # resident individua"s

70 Permi""ed )e/i"# Pa ments to!ards a current account transaction in accordance !ith the provisions of Foreign E7change Management (*urrent Account ;ransactions) .u"es$ 2@@@ and to!ards a capita" account transaction permissi#"e under the Foreign E7change Management (Permissi#"e *apita" Account ;ransactions) .egu"ations$ 2@@@ are a""o!ed( 80 Accoun"ing Procedure, ;he accounting procedure$ notiona" rate$ reporting format,s stem !i"" #e same as in the case of RFC de!o#i"#0 ;he 1? head for .F* is used for .F* (8) deposits a"so( 2ut 3or "he !ur!o#e o3 di#"inc"ion$ a #e!ara"e ledger ma #e maintained for .F* (8) deposits( For statistics,MIS purpose$ #ranches shou"d maintain Progressive #a"ance and #a"ance shou"d #e ta""ied as per the e7isting norms,procedures( A%%E;$RE ( A APP:(CAT( % F R ;o ;he Manager ((((((((((((((((((((((((((((((((((((((((((((((((((((((((( ((((((((((((((((((((((((((((((((((((((((((((((((((((((((( ((((((((((((((((((((((((((((((((((((((((((((((((((((((((( P"ease open an .F* Account in m name( ;he re"evant particu"ars are as under = 1( -ame and address of the app"icant = 2( -ationa"it = A(0rigin (state !hether ou are of = Indian origin) K( Passport particu"ars = -o( = Issuing Authorit = E7pir 8ate = 3( 8ate of arriva" in India to = #ecome a resident in India G(Particu"ars of residence outside India PE.I08 -A;/.E 0F 0**/PA;I0PE%(%5 A% RFC ACC $%T

*0/-;.<

F.0M

;0

(An attested cop of the re"evant pages of the passport must #e enc"osed)( 4( 8o ou continue to have an outside IndiaN If so p"ease give fu"" particu"ars L(Foreign currenc ,ies in !hich .F* = Account,s is,are to #e opened 9( ; pe of Account desired (State = !hether fi7ed deposit$ current or savings Account) I here# dec"are that I have gone through the provisions of the .F* Accounts Scheme( I dec"are that the particu"ars stated herein a#ove are correct and I am e"igi#"e to open and maintain .F* Account under the Scheme as app"ied( I agree that the .F* Account sha"" #e governed # the .F* Accounts Scheme and the directions issued # the .eserve 2an& under the Foreign E7change .egu"ation Act$ 194A$ from time to time( 8ate = P"ace = I-S;./*;I0-S ;0 ;)E APP?I*A-; 1(App"icant is advised to read carefu"" the .F* Accounts Scheme #efore ma&ing the app"ication( 2(Account !i"" not #e opened un"ess fu"" particu"ars are furnished in the app"ication form( (Signature) =

emp"o ment or #usiness or vocation

A(App"ication form du" fi""ed in and signed must #e accompanied # copies of the re"evant pages of the passport du" certified # the app"icant as true copies( ;he

passport shou"d #e su#mitted a"ong !ith the app"ication for verification( K(Furnishing an fa"se information in the app"ication amounts to a contravention of FEMA 1999( 3(App"icant shou"d furnish such other particu"ars or documents$ as ma #e re>uired # the authorised dea"er for the "atter to satisf himse"f that the app"icant is an e"igi#"e person and the funds proposed to #e credited to the .F* Account are e"igi#"e for the purpose( G(-omination faci"it is avai"a#"e to the .F* Accounts as in the case of resident rupee accounts( Annexure ( *, /nderta&ing from 8epositor of F*-. 2 , .F* regarding pena" provisions= I ,Fe understand that #an& !i"" #e charging,"ev ing pena" interest ,s!ap charges for premature c"osure of the deposits (together !ith s!ap charges$ if an )$ for an purpose as per ru"es given hereunder and I agree for the same( FC%R 8EP0SI;S= 1(If the F*-. (2) deposit has not run for G months$ overdue interest paid$ if an at the time of rene!a" of the deposit !i"" #e recovered( -o interest is pa a#"e on such deposits as the deposit !ou"d not have run for the minimum period of 12 months as per .2I stipu"ation( 2( If the deposit has run for 12 months and a#ove$ pena" interest O 1I (@(3I$ if premature c"osure is for the purpose of rene!a") !i"" #e recovered( RFC 8EP0SI;S= 1(If the deposit has not run for G month$ #ut overdue interest paid$ if an at the time of rene!a" of the deposit !i"" #e recovered( -o interest is pa a#"e on such deposits as the deposit !ou"d not have run for the minimum period of G month as per .2I stipu"ation( 2(If the deposit has run for G month and a#ove Pena" interest O 1I (@(3I$ if pre mature c"osure is for the purpose of rene!a") !i"" #e recovered(

SI1-A;/.E 0F ;)E */S;0ME.